Matt
@fightn4food · creative, Every Wednesday Night
Why not return the money to your customers?
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Daniel Schreiber
@daschreiber · CEO & Co-founder, Lemonade
@fightn4food We're in total agreement 'spiritually'. However the law in NY doesn't allow that right now - but we're working on updating the law! At the same time we're hoping that even once the law changes customers will still choose to give the money to a cause. It's nice to have insurance were all parties agree that unclaimed money goes to a good cause. See Professor Ariely's explanation here https://youtu.be/6U08uhV8c6Y
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Justin Mares
@jwmares · Co-author, Traction Book
@daschreiber @fightn4food what happens if your claims are larger than your capital pool - do you charge users more? Claw back money from charities? How does this work?
As far as I know most insurance companies have huge pools of capital for this reason, which is why they don't aggressively lower rates all the time.
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Alex Barnes
@alexbarneshere · Strategy & BD, Knotel
@jwmares @daschreiber that's what reinsurers are for. As @daschreiber mentioned, they are reinsured by A rated carriers (insurers of the insurers).
I also agree that this is not p2p in the sense that most people would imagine it to be. I think direct to consumer (no brokers) is more fitting.
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Brian Lee
@kay0stheory · code monkey @ theymadethat
@daschreiber why not make it a co-op instead so that there's a larger pool?
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Siddhant Patel
@siddhant_patel
@fightn4food This is how one of the makers justifies it somewhere else in the comments -
"In terms of why we're giving it to charity, part of the thesis is that people feel entitled to embellish claims (25% say so to pollsters) and that this creates artificially high claims ratios. Knowing over-claiming is impacting a cause you believe in, rather than an insurance company you don't, creates a self-fulfilling dynamic where people claim more responsibly and therefore charities get more"
This makes absolute sense.
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Matt
@fightn4food · creative, Every Wednesday Night
@siddhant_patel Thanks for looking that up and finding those stats... that's interesting. I would still think the 'cause' people care most about is themselves or their families. I think If you don't happen to have THEIR specific cause, then they'll continue to overclaim.
I'm just a firm believer in giving your customer your max value. I believe both these approaches add value. I just know several friends and I have wanted an insurance company that paid US back in some way and I thought this was it.
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Stuart McCroden
@mccroden · (undefined)
@daschreiber @fightn4food You could if you were a mutual insurance company.
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gil sadis
@gilsadis
@fightn4food @siddhant_patel we don't think we can eliminate fraud completely, but we have some good ideas about how we can reduce it. We really believe that we can build an insurance company that believes in people and people believe in it. Check out this video for more information about this - https://youtu.be/6U08uhV8c6Y
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Zev Lapin
@bbzeven · Cofounder, Parachute.co
@daschreiber I like the cause contribution component. How does it work in terms of tax write offs? Is lemonade donating to charity or am I? Also, like many others in this thread, I think the "p2p" lingo detracts from the message, which can really be much stronger. Instead of me wondering how this is p2p, I could be thinking "I get it, Insurance that delights and wants to help me get my money" - When I went to the landing page, I couldn't appreciate all the good stuff because I was so busy trying to understand what p2p insurance is.. Just my two cents.
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Shai Wininger
@shai_wininger · Founder @ Lemonade.com & Fiverr
@jwmares @daschreiber @fightn4food we've prepared for this, and even plan for it. Our models predict that on average a certain % of groups will consume their pool entirely. This is why we've got external reinsurance that covers groups on the group cohort level - which is the first time reinsurers have done that - ever! This way, there no chance money will run out. It's also completely seamless to our users, so if the money in the pool runs out - we continue to pay instantly.
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